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Guest Times: The pros and cons of the WPP era

Shivaji Dasgupta, Founder of INEXGRO Brand Advisory, writes that what the WPP regime did most successfully was instil process discipline, financial and otherwise, teaching management to show profits whatever be the state of the top-lines, through cutbacks and deferments

Martin Sorrell

As WPP enters a serious point of transition, it is time to assess its impact on the Indian Advertising industry. To understand its role as a catalyst and adhesive, both for the present and the future, as well as evaluate its legacy in nurturing talent and influencing the behaviour of clients. As a member of that system for many years, I believe sincerely that the overwhelming negatives of this regime far outweigh the considerable positives, significantly responsible for the chaotic state of the industry.

It is far easier to start with the positives and, in this case, there certainly have been many. While studying in MICA, we heard of many exceptional creative organisations, notably MCM, folding up due to fiscal mismanagement and even certain legacy agencies operating in the red, a notable exception being the exceptionally well-run Rediffusion. What the WPP regime did most successfully was instil process discipline, financial and otherwise, teaching management to show profits whatever be the state of the top-lines, through cutbacks and deferments. Global best practices of sustainable P&L operations, in tandem with universal training and technology resources, led to an extended honeymoon with the newly-taken-over, adding considerably to ethical business practices. Quite like one happy family, united yet competitive, WPP promised to be an agent of rebirth for the Marcom fraternity, a potent and executive version of the United Nations. We were captivated especially by the Annual Report, exposing an empire of exceptional talent with some fine writing by Sir Jeremy Bullmore in particular.

In 2018, however, evidence suggests that in India, the WPP regime has been a dangerous failure, endangering the futures of both industry and its people. For a structure designed to make money, its inability to earn a premium for services, due to superior talent or inflation, is quite astonishing though explicable. Truthfully, no client in this country pays a higher retainer due to the holding-company affiliation, invariably connected to the perceived quality of local talent and their proven credentials. What’s more, the fact that every second agency bears the WPP badge makes this task even more difficult, how can one child be logically seen as a worthier fellow purely on parentage? This reality bred an entire legion of Denominator Managers, thoroughly competent in cutting costs to balance the sheets, but neither motivated nor trained to gun for growth, by enlarging the perception or simply the depth and width of services. It is no surprise that the retainer ticket sizes are static and everybody is actually relieved with status quo.

Then the debilitating impact of the media-creative divide, truthfully a death-knell for creative agencies for many reasons. For starters, it created a further degree of separation with accountability thus reducing its premium and helped accelerate the culture of creative development unconnected to business results. The presence of media planners in-house was a formidable bridge to performance, reach and OTS credible surrogates for sales figures. The inability to hold result-oriented conversations crippled over time the skills and impact of the Agency Account Director, now capable of talking only about artworks and not about efficacy. In sum, this move dented the strategic value of the creative agency and in a ‘relationship’-driven market like India reduced the bridges of credibility with the client.

While remaining ruthlessly neutral, WPP could certainly have helped its roster agencies to become ready for the Digital world, through skills and technology as well as process. Instead of organizing seminars like WPP Stream, effectively a road-show for client acquisition, a similar impetus on training and development would be truly invaluable, for existing practitioners and agency boardrooms. Every unit, large or small, is left to fend on its own in this matter, leading to the smaller nimble set-ups taking a lead while the bigger players stay in the background. The short-term money-making approach of the parent renders lengthy investments questionable and often redundant. Companies are thus not making sufficient money and are becoming easy prey for consultants, as fillers in the value chain, a pattern that may accelerate briskly.

Finally, and most disturbingly, WPP policies must take considerable responsibility for the mass migration of fine talent to other industries, driven out by a strategic cartel of group companies determined to lower levels of salary in order to compensate for lack of growth. In a vicious cycle of diminishment, the dual pressures of keeping balance sheets clean and shrinking margins, the highest cost-head of people needed to be constantly brought down in absolute remuneration as well as irrational deployment of time. Purely conversational statistics will reveal the static state of entry-level and mid-level salaries, uncompetitive with any other industry, and a worrying HR culture of replacement-at-lower-cost to cover deficiencies. An inevitable result is the reign of mediocrity in the agencies, good people driven out by bad money. A mandated focus on growth and adding value, in a growing market, would have helped retain talent who could become growth catalysts.

As mentioned in the beginning, every regime has its pros and cons with WPP being no exception. It is also true that over time in India, the policies of the holding company have led to a shrinkage across industry; in revenues, profits, talent and client credibility. Truly an unfortunate outcome of what promised to be a beautiful association destined for greatness.

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